CMA secures changes to Simba Sleep’s online sales practices
The CMA has secured agreement from mattress firm Simba Sleep to protect UK shoppers against potentially misleading claims and pressure selling tactics.
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Simba Sleep has agreed to change its online sales practices as a result of an investigation by the Competition and Markets Authority (CMA) which raised concerns that the mattress company may have misled customers about price reductions and put unfair pressure on them to make quick purchases.
In December last year, the CMA opened an investigation into Simba Sleep, setting out its concerns and asked the firm to address them. The company has now signed formal commitments known as undertakings. It has committed to action, including:
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Genuine discount claims: Simba Sleep will ensure any ‘was’ price is genuine – in other words, that they actually sell a sufficient volume of the product at that price before using it as a ‘was’ price.
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Countdown clocks: Simba Sleep will ensure that any countdown clocks used on its websites are clear; specify prominently which products they apply to; and do not give consumers a false impression that they must act quickly – or that when the clock ends the product will revert to the ‘was’ price – if this is not the case.
This investigation into Simba Sleep is part of the CMA’s ongoing programme of consumer enforcement work focused on ‘Online Choice Architecture’ which is aimed at tackling potentially harmful online selling practices. The CMA previously notified Emma Group, another mattress company, that unless it commits to making changes to its practices the CMA will launch court action.
Last month, the CMA secured a total of over £4 million in refunds for Wowcher customers who were signed up to Wowcher’s ‘VIP membership’ via a pre-ticked box, which risked customers being signed up without their full understanding. The refunds will be provided in the form of credit, with the option to convert to cash.
Hayley Fletcher, Interim Senior Director of Consumer Protection at the CMA, said:
With increasing living costs adding pressure to household budgets, more of us are looking for bargains online when shopping for home essentials and expensive purchases like a mattress.
Companies that use potentially unfair tactics to sell products – including misleading countdown clocks and false pricing claims – risk pressuring customers into making purchases in haste and could be getting an unfair advantage over fair-dealing firms.
This agreement means a better shopping experience for Simba Sleep customers – but it’s now time for other traders in the mattress sector to take note and ensure their practices comply with consumer law.”
To support the CMA’s ongoing work addressing potentially harmful online sales practices in the online mattress sector, the CMA has also published principles which are aimed at traders in the online mattress sector who use price reduction claims. Businesses should make sure they only use ‘was/now’ discount prices if a sufficient number of sales have been made at the higher ‘was’ price for a sufficient period of time.
To ensure Simba is complying with the commitments it signed, it must report to the CMA within the next 6 months.
Full details of the undertakings are available on the Simba Sleep case page.
Notes to editors
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Simba Sleep Limited is referred to as ‘Simba Sleep’ in this press notice.
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As set out in the undertakings, Simba believes it is already in compliance with its commitments but has until 9 September 2024 to ensure its internal compliance processes are in place, and fully operational.
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On occasion instead of using a ‘was’ price to denote the original, undiscounted price, Simba Sleep used ‘RRP’ or ‘recommended retail price’.
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Emma Group, as used in this press notice, relates to Emma Matratzen GmbH, Emma Sleep GmbH and Emma Sleep UK Limited and their directors. Further details of the CMA’s consumer protection case in relation to Emma Group can be found here: Emma Group: consumer protection case.
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The CMA’s principles apply to both volume and duration when traders in the online mattress sector use a reference price, against which they promote a lower promotional price. The principles set out what retailers in the online mattress sector should do to reduce the risk of infringing the law. In particular, such retailers should not describe a product as ‘on sale’ with a ‘was’ price, for longer than it was offered for sale at that ‘was’ price, and they should stop using the ‘was’ price once they have sold twice as many items in the sale as they actually sold at that ‘was’ price. Examples:
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The CMA has seen evidence of retailers in the online mattress sector describing their products as on special offer, when they sold very few of those products at the ‘was’ price. For example, across various periods sampled in 2021 to 2023, based on evidence gathered from 4 companies, the CMA found that Company A sold only 7.7%, Company B sold 1.6%, Company C sold 5.5%, and Company D sold just 0.9% of their mattresses at or above the quoted reference prices. The CMA view is that using a reference price in the online mattress sector based on sales at such low comparative volumes is likely to be misleading.
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The CMA has also seen examples of the same product being offered at a discount, and then immediately afterwards being offered as part of a bundled deal.
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In April 2022, the CMA published the discussion paper ‘Online Choice Architecture: How digital design can harm competition and consumers Discussion Paper’ and the accompanying ‘Evidence Review of Online Choice Architecture and Consumer and Competition Harm’ paper, which reported that the way businesses present information and choices to consumers online can influence purchasing decisions.
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The main consumer protection legislation currently relevant to this investigation is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs aim to protect consumers from unfair commercial practices such as the misleading provision or omission of information.
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Parliament recently passed legislation to give the CMA stronger consumer powers, which will enable the CMA to decide when consumer law has been broken without taking a case to court. The Digital Markets, Competition and Consumers Act 2024 will, once it comes into effect, empower the CMA to fine those firms that do break consumer law up to 10% of their global turnover.
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The Advertising Standards Authority (ASA) issued rulings on 21 September 2022 (Complaint Ref: A22-1151799 Simba Sleep Ltd) and 6 March 2024 (Complaint Ref: A23-1200296 Simba Sleep Ltd) against Simba Sleep, in which it upheld complaints in connection with advertisements which were found to use misleading pricing claims and to be in breach of The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the ‘CAP Code’).
- Find out more on the CMA’s consumer campaign on misleading online practices.
- For media enquiries, contact the CMA press office on 020 3738 6460 or [email protected]